1 CRM(M) No. 541/2023 S. No. 63 Regular Cause List HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT SRINAGAR CRM(M) No. 541/2023 Surinder Babu Budhiraja and Anr. …Appellant/Petitioner(s) Through: Mr. Wajid Haseeb, Advocate Vs. Syed Muzamil Ahmad and Ors. ...Respondent(s) Through: Mr. S. Arshad Andrabi, Advocate CORAM: HON’BLE MR JUSTICE VINOD CHATTERJI KOUL, JUDGE O R D E R 10.02.2025 1. Complaint filed under Section 420, 406 IPC titled Syed Muzamil Ahmad v. Surinder Babu Budhi Raja and Ors.”, Cognizance Order as well as proceedings initiated by the court of Judicial Magistrate 1st Class Pulwama (Trial Court) are sought to be quashed in this petition. 2. The case set up by petitioners is that they are running business under name and style of M/s Star Fruit & Vegetable Company, New Sabzi Mandi, Azadpur, Delhi and in the course of their business they met one Zahoor Ahmad Mir and got involved into business transaction and resultantly said Zahoor Ahmad Mir was in debt of Rs.11,88,584/- to be payable to petitioners. Upon repeated requests the said Zahoor Ahmad Mir failed to liquidate his liability and, in the meantime, respondent no.1 approached petitioners and proposed to send apple boxes in discharge of liability of Zahoor Ahmad Mir and accordingly after parties agreed to this arrangement, respondent no.1 in the year 2018 supplied apple boxes to petitioners. The amount of apples sent to petitioners were not otherwise satisfying the full discharge of liability, but petitioners after receiving the 2 CRM(M) No. 541/2023 apples, found that the said apples were rotten and not fit for sale and instantly it was conveyed to respondent no.1 and aforesaid Zahoor Ahmad Mir that apples were not worth mercantile and, as such, liabilities against which they were sent had remained unsatisfied and petitioners demanded money from the said Zahoor Ahmad Mir. It is being also stated that although respondent no.1 had no business liabilities towards petitioners, but as he had stepped into the shoes of aforesaid person to discharge his liability and that his act of sending the rotten apples had incurred an independent liability to petitioners for labour expenses, thus, petitioners requested respondent no.1 as well as Zahoor Ahmad Mir to discharge their respective liabilities. Respondent no.1 sought some time to settle the matter, but after lapse of considerable period of time, he failed to discharge his liability as well as liability of other person and consequently, petitioners took the matter with various Bazar Committees and respectable in between both the parties and when said Zahoor Ahmad Mir failed to manage his escape from liability and in order to harass petitioners, he hatched conspiracy with respondent no.1 and filed impugned complaint in order to force petitioners to forego their legitimate claim to the tune of Rs.11,88,584/-. 3. Petitioners challenge complaint precisely on the ground that the civil dispute has been given colour of criminal complaint; that the compliant has been filed with an intention to settle the civil dispute in a criminal court. 4. Heard learned counsel for the parties and perused the material on file. 5. A criminal complaint came to be filed by respondent no.1 before the Trail Court wherein it is alleged that respondent has supplied 1034 cases of apple, comprising 956 daba-small boxes and 78 paities-big boxes in two trucks bearing Registration Nos. JK13/2180 and JK13/3176, vide challan No. 01 & 21 dated 18.02.2018 to the State Fruit and Vegetable Company and delivered and received by accused persons at shop No.284 New Sabzi Mandi Azadpur Delhi, which is run by accused No.1 along with other accused. It is also alleged that respondent received bill from the State Fruit and Vegetable Company New Sabzi Mandi Azadpur Delhi dated 20.02.2018, wherein the acknowledgement of fruits has been conveyed, 3 CRM(M) No. 541/2023 by which it seems that payment has been credited into the account of complainant. However, no such payment has been credited into the account or received by complainant till date. The respondent/ complainant went to Delhi in search of accused persons to recover money from them. It is also stated by complainant that he enquired about them from neighbouring business men in Azadpur Mandi and narrated the whole story to them. The head of said Mandi told respondent that no licence in the name of accused No.1 has been issued with regard to shop A-284, who portrayed himself as the owner of Star Fruit and Vegetable Company. 6. The Trial Court while entertaining the complaint found that since petitioners were residents of a place outside the jurisdiction of Trial court, therefore, ordered enquiry under Section 202 Cr.P.C. On obtaining report, the Trial Court issued process against the accused for offence punishable under Section 420 IPC, which is being challenged in this petition. 7. It is evident from contents of complaint that respondent no.1 alleges that he has supplied apple to petitioners but no payment was made by them and thereafter he went to Azadpur Mandi to know about respondents but there he was informed that no licence in the name of accused No.1 has been issued with regard to shop A-284, who portrayed himself as the owner of Star Fruit and Vegetable Company. Contrary to this story, it is contention of petitioners that one Zahoor Ahmad Mir was owing them Rs.11,88,584/- and that respondent no.1 approached them and proposed to send apple boxes in discharge of liability of Zahoor Ahmad Mir and accordingly after parties agreed to this arrangement, respondent no.1 in the year 2018 supplied apple boxes to petitioners. 8. In view of the set of facts, the complaint does not disclose any criminal offence at all inasmuch as criminal. There had been a significant hike in a number of frivolous complaints being filed to settle civil disputes. Such complaints also relate to commercial disputes which ought to have resolved through the forum of civil courts, but such civil disputes are given criminal colour by lifting from the penal laws certain words or phrases and has been implanting them in the criminal complaint. This mechanism of settling the civil disputes has been increasingly used for recovery of 4 CRM(M) No. 541/2023 alleged outstanding amount payable by one party to another in the course of business transactions. 9. In Govind Prasad Kejriwal v. State of Bihar and Another, reported in AIR 2020 SC 1079, the Apex Court has observed that it cannot be disputed that while holding enquiry under Section 202 of Cr.PC, the Magistrate is required to take a broad view in the prima facie cases. However, even while conducting/ holding an enquiry under Section 202 Cr.PC, the Magistrate is required to consider whether even a prima facie case is made out or not and/or whether dispute is purely of a civil nature or not and/or whether civil dispute is tried to be given a colour of criminal dispute or not. The Supreme Court while holding that the dispute between the parties can be said to be purely a civil dispute, therefore, Supreme Court quashed and set aside the impugned proceedings. The underlined principle observed by Hon’ble Apex Court is that filing of criminal complaint to settle civil dispute is nothing but an abuse of process of law. 10. In Commissioner of Police and Ors. v. Devinder Anand and Others, the Hon’ble Supreme Court has opined that criminal proceedings initiated by original complainant are nothing but abuse of the process of law for settling a civil dispute. Even considering the nature of allegations in the complaint, the Supreme Court was of the firm opinion that no case was made out for taking cognizance of an offences under Section 420/34 IPC. The case involves a civil dispute and for settling a civil dispute, a criminal complaint has been filed, which is nothing but an abuse of process of law. 11. The Supreme Court in the case of Indian Oil Corporation v. NEPC India Ltd. and others, (2006) 6 SCC 736, has summarized the principles about exercise of jurisdiction under Section 482 Cr.P.C. to quash complaints and criminal proceedings as under:- “The principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to quash complaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a few- Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre (1988) 1 SCC 692, State of Haryana v. Bhajan Lal,1992 Supp (1) SCC 335; Rupan Deol Bajaj v. Kanwar Pal Singh Gill (1995) 6 SCC 194, Central Bureau of Investigation v. Duncans Agro Industries Ltd (1996) 5 SCC 591; State of Bihar v. Rajendra Agrawalla (1996) 8 SCC 164, Rajesh Bajaj v. State NCT of 5 CRM(M) No. 541/2023 Delhi,(1999) 3 SCC 259; Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd(2000) 3 SCC 269 [pic]Hridaya Ranjan Prasad Verma v. State of Bihar (2000) 4 SCC 168, M. Krishnan v. Vijay Singh (2001) 8 SCC 645 and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque( 2005) 1 SCC 122. The principles, relevant to our purpose are: (i) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused. For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint. (ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with mala fides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable. (iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution. (iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence. (v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.” 12. In the case of Vesa Holdings Pvt. Ltd and another v. State of Kerala and others, reported in (2015) 8 SCC 293, the Apex Court has observed that the real test is whether allegations in a complaint disclose criminal offence of cheating or not. If there is nothing to show that there was any inception on behalf of an accused person to cheat which is a condition precedent for an offence u/s 420 IPC. 6 CRM(M) No. 541/2023 Criminal proceedings should not be encouraged when it is found to be mala fide or otherwise an abuse of the process of the courts. Superior courts while exercising this power should also strive to serve the ends of justice. Allowing police investigation to continue would amount to an abuse of the process of the court and that the High Court committed an error in refusing to exercise the power under Section 482 Cr.P.C. to quash the proceedings. 13. The principles laid down by the Supreme Court are that a complaint can be quashed where allegations made in complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused. For this purpose, complaint has to be examined as a whole, but without examining merits of allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint. A complaint can also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with mala fides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable. The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution. The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence. 14. In a case of Vinod Kumar v. State of Bihar, the Supreme Court reiterated the principle of law that criminal proceedings are not to be used as a shortcut for civil remedies and while holding that no case of cheating is made out in any of the FIRs, the petitions were allowed and FIRs were quashed. 7 CRM(M) No. 541/2023 15. The conclusion which can be drawn essentially stipulates that courts have time and again deprecated the initiation of false criminal proceedings in cases having the element of civil dispute. 16. Having regard to the allegations contained in the complaint, the dispute is with regard to the payments to be made by the petitioners regarding the supply of apples by respondent-complainant. The dispute is a civil dispute as to recovery of outstanding amount on account of the goods supplied by the respondent/complainant to petitioners herein. Such a dispute can be resolved by resorting to remedy before the Civil Courts. The respondent has invoked the jurisdiction of criminal court by filing a complaint as a shortcut method to seek recovery of the amounts alleged to be due to him on account of a business transaction. This issue has been considered in a number of cases by the Supreme Court and has deprecated the practice of filing criminal complaints to force other-side to settle the disputes which are civil in nature. The dispute between respondent and petitioners is with regard to outstanding amount on account of supply of goods. This issue squarely falls within the category of civil dispute, but the respondent has given it a criminal colour by filing a complaint by lifting from the penal laws certain words and phrases and has implanted them in the criminal complaint. Therefore, for the reasons that the allegations contained in the complaint on the basis of which trial court has issued process is with regard to a dispute which is civil in nature for which the complaint would not be maintainable and as such, indulgence under and in terms of Section 482 Cr.P.C. is warranted. 17. For the foregoing reasons, this petition is allowed and Complaint filed under Section 420, 406 IPC titled Syed Muzamil Ahmad v. Surinder Babu Budhi Raja and Ors.”, is dismissed and Cognizance Order as well as proceedings initiated by the court of Judicial Magistrate 1st Class Pulwama, are quashed. (VINOD CHATTERJI KOUL) JUDGE SRINAGAR 10.02.2025 Manzoor Whether approved for reporting ? No Manzoor Ul Hassan Dar I attest to the accuracy and authenticity of this document Srinagar 26.03.2025 11:29